USING ECONOMIC ANALYSIS Participant Skills Assessment: Using Economic Analysis in Public Health

LEARNING OBJECTIVES • Describe the types of economic analyses • List the components of a cost-benefit analysis (CBA) • Use results of CBAs to inform decisions about implementing public health interventions • Calculate the cost-effectiveness ratio and interpret the findings

INSTRUCTIONS Read the scenarios and answer the questions that follow. When you have completed the assignment, email your written answers to your mentor. Check with your mentor for the assignment deadline.

ESTIMATED COMPLETION TIME 1 hour, 15 minutes

REFERENCES The scenario for this exercise is based on the following articles with some modifications:

Rajgopal R, Cox RH, Lambur M, Lewis CS. Cost-benefit analysis indicates the positive economic benefits of the expanded food and nutrition education program related to chronic disease prevention. J Nutri Educ Behav. 2002;34(1)26-37.

Ginsberg GM, Lauer JA, Zelle S, Baeten S, Baltussen R. Cost- effectiveness of strategies to combat breast, cervical, and colorectal cancer in sub-Saharan Africa and South East Asia: mathematical modeling study. BMJ. 2012;344:1-18.

PARTICIPANT |1 USING ECONOMIC ANALYSIS Scenario 1: Scenario You are part of a nongovernmental organization that creates partnerships in the community to facilitate chronic disease prevention measures. Your organization spends time and resources helping community groups, hospitals, schools, local government agencies, and other local groups establish education programs. You have recently become aware of a state-sponsored nutrition education program in a neighboring district, District X. After researching the program, your organization became convinced the District X nutrition education activities are worthwhile and began advocating the program to decision-makers and stakeholders in your own district. While there is some interest, the program would have to be funded with district resources, and the lead decision-maker informs you that such a program cannot be funded without evidence that it is financially worthwhile. The District X program focuses on educating homemakers and family members through various means to achieve the knowledge, skills, attitudes, and habits needed to attain a sound, healthy diet. The long-term goal is improved health status of the population and decreased incidence of chronic diseases. Your group decides to undertake an economic analysis of the District X program in terms of costs saved or averted because of good nutrition practices taught in the program.

1. Write a primary objective for this economic analysis.

2. You mention your planned economic study to a few stakeholders. One of them informs you that the current administration in the district is highly focused on the budget and likes to see all plans and expected benefits in monetary terms. Considering the decision-makers that you wish to influence, what type of economic analysis should you use? Why is this the most appropriate analysis?

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Scenario Update I: Scenario Update You work closely with District X program staff to conduct the analysis. District X officials are also interested in the results of the analysis but do not have the expertise to conduct it themselves. Your first task is to list diseases and health conditions that your group has decided are the most impacted by nutritional intake. The list of diseases and conditions is as follows: Diseases or conditions that could be delayed or avoided by adopting nutrition behaviors taught in the education program • Stroke • Hypertension • Colorectal cancer • Heart disease • Osteoporosis • Foodborne illness • Type 2 diabetes • Obesity

3. Consider this diagram and identify the anticipated resources (inputs) and changes in health behaviors (outputs) and health outcomes of the nutrition education program. An example in each category has been completed for you.

Resources: 1. Printed Materials

2. ______

3. ______

4. ______

5. ______

6. ______

PARTICIPANT |3 USING ECONOMIC ANALYSIS Changes in Health Behavior: 1. Increased intake of fruits and vegetables

2. ______

3. ______

4. ______

5. ______

6. ______

Expected Changes in Health Outcomes: 1. Case of disease prevented

2. ______

3. ______

4. ______

5. ______

6. ______

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Scenario Update II: Scenario Update Your team makes an exhaustive inventory of specific inputs and outcomes similar to the list above. Next, you put monetary values on each of the inputs according to market prices. Then, team subject matter experts quantify typical yearly treatment causes for the Type A and Type B diseases, and identify specific behaviors taught by the program that, if undertaken, would impact each one. Example results of this effort are shown in the table below. The team then undertakes a thorough literature search to assess the population-level impact that each behavior is likely to have on the disease or condition, and develops a set of “optimal nutritional behaviors” that collectively would be anticipated to have the most impact on health.

Table1. Disease-specific yearly treatment costs and associated behaviors taught by the nutritional education program in District X, 2011

Disease / Health Yearly Associated behaviors Condition Treatment Cost (USD) Stroke $22,000 - Prepare/serve food with less salt - Using food labels to select food - Meal planning around dietary guidelines - Reduce/control weight - Increased physical activity Hypertension $348 - Same as stroke Colorectal cancer $28,000 - Increased intake of fiber, complex carbohydrates, vegetables and fruits, vitamins A and C, and calcium - Decreased fat intake - Meal planning around dietary guidelines - Food selection and preparation (to reduce fat and carcinogens)

Heart disease Bypass surgery: - Decreased intake of sodium/salt $30,000 - Prepare food with less fat, less salt Other - Decreased fat intake treatments: - Increased intake of complex $3676 carbohydrates, fiber, fruits and vegetables - Using food labels to select food - Meal planning around dietary guidelines - Reduce/control weight - Increased physical activity Type 2 Diabetes $6182 - Increased intake: fiber, vegetables, and fruits - Decreased intake of fats and sweets group - Weight control increased physical activity - Plan foods around dietary guidelines (based

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Disease / Health Yearly Associated behaviors Condition Treatment Cost (USD) on instructions of physician/registered dietitian) - Using food labels to select food Obesity $625 - Increase intake of fiber, complex (includes only carbohydrate, fruits and vegetables costs for - Decreased caloric intake weight-control - Increased physical activity programs or - Decreased intake of fats and sweets group special - Food preparation to reduce fat and calories products - Using food labels to select food purchased for - Use of other sound weight control methods weight control)

4. Table 1 shows direct costs of treatment. What is the perspective of this study? Should intangible costs and benefits be included in this analysis? Why or why not?

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Your team assembles data on 3100 program participants in a given year. District X kept detailed records and follow-up information about participation in the education program and behaviors adopted. The tangible effects of the nutrition education program are calculated as follows: Formula: [A] × [B] × [C] × [D] × [E] = F. When [A] Annual number of nutrition program graduates having entry and exit data (3100);

[B] Disease/condition incidence rate for the population (as reported in the literature), with the disease rates for the target population used if available; otherwise, incidence rates for the general population were used;

[C] Population Attributable Fraction: the portion of the disease/condition believed to be related to diet, which was the estimated percentage of those who would normally get the disease but who might avoid or delay its onset by adopting recommended nutrition behaviors;

[D] Percentage of graduates with optimal nutritional behaviors related to avoiding or delaying the disease/condition;

[E] Present value of those monetary benefits;

[F] Total benefit for all of the diseases/conditions, based on the potential delay or avoidance of disease treatment costs among the 3100 program graduates during the study year.

5. Using the formula presented above ([A] × [B] × [C] × [D] × [E] = F) and the information in Table 2 below, calculate the total direct benefits of the nutritional education program in District X.

Note: Total direct benefits cannot be calculated for stroke, osteoporosis, and common infant diseases with the information provided.

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Table 2. Calculated costs of diseases/conditions associated with optimal nutritional behaviors and monetized benefit of prevention/delay

[B] [C] [D] [E] [F] Disease / Condition 1996 Average Disease Rate Diet- No. of Present Total Direct Treatment in Population, Related Graduates Value of Benefit Cost/Person, % Proportion, with ONB Benefit USD % (%) Type A Stroke $23,025 1.7 NA 290 (9.4) $13,144 Colorectal cancer $33,046 15.0 35 59 (1.9) $16,425 Hypertension $364 37.4 45 290 (9.4) $698 Heart disease $3,517 31.2 26 34 (1.1) $692 Type B Osteoporosis $11,828 28.0 NA 885 (28.5) $65,469 Foodborne illness $1,009 2.8 100 1664 (53.7) $18,867 Type 2 diabetes $6,182 14.5 45 59 (1.9) $45,898 Common infant $1,537 100.0 NA 87 (2.8) $1,537 diseases Obesity $625 37.0 50 59 (1.9) $11,687

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6. Given the information below and the calculated total direct benefits, calculate the total cost-benefit ratio for the nutritional education program. a. Create your ratio so that the number of dollars of benefit is compared to one dollar of cost, in the format: (Benefit: $1.00). b. Does the program produce economic benefits that are greater than its costs? • Total nutrition education program costs (annual): $1,713,081. • Calculated benefit for stroke: $65,112. • Calculated benefit for osteoporosis: $16,195,687. • Calculated benefit for common infant diseases: $133,412.

Scenario 2 New Scenario You are part of a nongovernmental organization that has been asked to examine the costs and health effects of interventions to combat breast, cervical, and colorectal cancers to guide resource allocation decisions in developing countries. Specifically, you have been asked to estimate the cost per disability adjusted life year (DALY) averted for different prevention and treatment strategies.

Table 3. The costs and effects of various health interventions

Intervention Annual cost per Annual DALY capita ($Int) averted per million population Smear test at age 40 (with lesion 0.14 462 removal) + cancer treatment Treatment of stages I-IV breast 0.68 313 cancer, plus biannual mammographic screening

7. After conducting your analysis you find the estimated costs and annual DALYs averted for each intervention (Table 3). Use this information to calculate the cost- effectiveness ratio for each intervention.

8. The WHO-Choice considers an intervention yielding a healthy year of life for less than three times gross domestic product (GDP) per capita “cost-effective”, and an intervention yielding a healthy year of life for less than the GDP per capita “very cost effective”. If the GDP per capita in the country we are studying is $Int2000, how would you classify the cost-effectiveness of the above interventions classified?

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